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India Plans to Ban Cryptocurrency Trading

India plans to introduce a new law banning trade in cryptocurrencies, placing it out of step with other Asian economies which have chosen to regulate the fledgling market.


The bill is expected to be discussed shortly by the federal cabinet before it is sent to parliament, according to people familiar with the development who asked not to be identified, citing rules on speaking with the media.


The federal government will encourage blockchain, the technology underlying cryptocurrencies, but is not keen on cryptocurrency trading, according to two people. India’s finance ministry spokesman didn’t respond to a call and a message seeking comments.


india plans to ban cryptocurrency



The Indian central bank had in 2018 banned crypto transactions after a string of frauds in the months following PM Narendra Modi’s sudden decision to ban 80% of the nation’s currency. Cryptocurrency exchanges responded with a lawsuit in the Supreme Court in September and won respite in March 2020.


Effect on Economy


The win in court prompted an almost 450% surge in trading in just two months since March, according to TechSci Research, reviving concerns as more Indians risk savings amid job losses and an economic slowdown worsened by the coronavirus pandemic. Bitcoin marketplace Paxful reported 883% growth between January to May 2020 from around $2.2 million to $22.1 million. WazirX, a Mumbai-based crypto exchanger grew 400% in March 2020 and 270% in April 2020 on a month-on-month basis, according to TechSci.


Source: https://economictimes.indiatimes.com/news/economy/policy/government-plans-to-introduce-law-to-ban-cryptocurrency-trading/articleshow/78132596.cms

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